Testamentary Trust Attorney

​A testamentary trust is a trust that is created within a Last Will and Testament and only goes into effect upon the death of the person creating the will (the testator). Unlike living trusts, it does not exist while you are alive; it is “triggered” by the probate of your will to manage assets for your beneficiaries.

​The terms of the trust are written directly into your will, outlining how specific assets should be managed and distributed. After you pass away, your will goes through probate, the assets are transferred into the trust, and a designated trustee manages them according to the instructions you left.

​No, testamentary trusts do not avoid probate. Because the trust is created inside a will, the will itself must first be admitted to probate before the trust can be established and funded.

​The main difference is timing and probate. A revocable living trust is active while you are alive and helps avoid probate, whereas a testamentary trust is created only after death and requires probate to activate. However, testamentary trusts often have lower upfront costs than living trusts.

​They allow parents to control when and how children receive an inheritance, rather than giving a minor a lump sum they cannot legally manage. You can stipulate that funds be used for health, education, and maintenance until the child reaches a mature age.

​Testamentary trusts offer low upfront costs, court oversight (if requested by the beneficiaries) during probate (which provides transparency), and the ability to protect assets from a beneficiary’s creditors, divorce, or poor spending habits.

​The primary downsides are that they necessitate probate, which can be time-consuming and public, and the trust is not funded until after the estate administration process is complete.

​Yes, this is a key feature. You can set specific conditions, such as requiring a beneficiary to reach a certain age (e.g., 25, 30, or 35), graduate from college, or remain drug-free before receiving distributions.

​A trustee, whom you select and name in your will, manages the assets. This can be a trusted family member, a friend, or a professional fiduciary like a bank or trust company.

​The trust only becomes effective upon your death and after the will has been submitted to the probate court. Until that time, you can change or revoke the terms of the trust by updating your will.

​Testamentary trusts are separate taxable entities that must file their own income tax returns (Form 1041). Income retained in the trust may be taxed at higher trust tax rates, while income distributed to beneficiaries is generally taxed at their individual rates.

​You establish one by having an estate planning attorney draft specific trust provisions within your Last Will and Testament. It does not require funding or separate management while you are alive. In addition, you must ensure you erase or have your beneficiary designations (like life insurance) point to your Estate/the testamentary trust, otherwise the assets will bypass this trust entirely.

​The will creating the trust is revocable while you are alive, meaning you can change the trust terms at any time. However, once you pass away, the testamentary trust becomes irrevocable and cannot be changed.

Even though the dispositive provisions are the same, it is part of your will and does not require the immediate retitling of assets or separate funding procedures while you are living. Therefore, the initial legal fees are often lower than those for a complex revocable living trust. However, because the Will must go through probate, the total cost to your estate after you pass is often significantly higher than with a Living Trust.

​You should consider an attorney if you want to leave assets to minors, heirs with special needs (requiring a properly drafted Supplemental Needs Trust to preserve government benefits), or beneficiaries who may struggle with money management, but you want a simple, cost-effective estate plan that activates only upon your death.